Defaulting Agents Clause Samples
The Defaulting Agents clause defines the procedures and consequences that apply when an agent under a contract fails to fulfill its obligations. Typically, this clause outlines what constitutes a default, the steps that must be taken if an agent defaults—such as notification requirements or the appointment of a replacement—and the rights of the non-defaulting parties. Its core practical function is to ensure continuity and protect the interests of all parties by providing a clear process for addressing and remedying agent defaults, thereby minimizing disruption and uncertainty.
Defaulting Agents. At any time any Lender serving as an Administrative Agent or an LC Issuer becomes a Defaulting Lender or Impacted Lender or a Distress Event occurs with respect to such Lender (each, a “Defaulting Agent”), then, during the Default Period, the Borrower (so long as no Default or Event of Default has occurred and is continuing) or the Required Lenders may, but shall not be required to, direct such Defaulting Agent to resign, and upon the direction of the Borrower (so long as no Default or Event of Default has occurred and is continuing) or the Required Lenders, as the case may be, such Defaulting Agent shall be required to so resign and upon such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. Such resigning Defaulting Agent shall cooperate reasonably and in good faith to effectuate the transfer of the agency to the successor agent, including the execution and delivery of such assignments, modifications, documents, certificates and further assurances as such successor agent may reasonably request.